EPC B and co-working, where the letting obligation sits

As a tenant, you take a lease from a building owner. The obligation to meet the minimum standard sits with the party granting the letting, which is your landlord.

As a sub-landlord, you grant occupation rights to members. Depending on how those rights are structured, you may be the party granting a letting, which puts the obligation on you for that space.

Which of those describes you is a question about your documents rather than about your business model, and the answer is not always the one operators assume.

Status: ProposedThe proposed EPC B requirement applies to privately let non-domestic buildings over 1,000 square metres. The unit of assessment is the building or the assessed unit, not the individual desk, office or membership.

So an operator occupying a floor of a larger building is not assessed on the floor in isolation, and the rating that matters is the one attaching to the assessed unit. That is often outside the operator’s control and inside the landlord’s.

Status: LawEPC E is the current enforceable minimum for privately rented non-domestic property in England and Wales.

Status: ProposedEPC B by 2031 for privately let non-domestic buildings over 1,000 square metres is a proposal, subject to secondary legislation, and the previously proposed EPC C by 2027 interim will not be taken forward.

An operator planning around a 2027 EPC C date is planning around something that is not happening.

The single most useful thing to establish is what your own lease says about improvement works, alterations and compliance, and what your member agreements actually grant.

Three questions worth answering before it becomes urgent.

• Do your member agreements grant a right of occupation that amounts to a letting, or are they a licence to use services and space?
• Does your lease permit the works that would be needed to improve the rating, and who pays for them?
• Does your lease oblige your landlord to maintain a particular standard, and does it say anything about a future change in the regulations?

Those are questions for your solicitor. We can tell you what a rating is, what would improve it and what that would cost. We cannot tell you where the obligation falls under your documents, and we will not pretend otherwise.

Establish the assessed unit and its current rating, rather than assuming the whole building is one unit or that your floor is assessed separately.

Establish the floor area against the 1,000 square metre threshold in the proposal.

Get the lease reviewed on the three questions above.

Then, and only then, decide whether any capital commitment is justified by a requirement that is not yet law.